Tax Credits and Reliefs
Tax Credits are available for: The tax credit is doubled for married couples who have opted for Joint Assessment or Separate Assessment if either spouse is 65 at any time during the tax year.
- Age Tax Credit
- Blind Persons
- Deeds of Covenant
- Dependent Relative
- DIRT Tax
- Home Carer's Tax Credit
- Incapacitated Child Tax Credit
- Top Slicing Relief on Lump Sum Payments
- Married Persons
- Health Expenses
- One Parent Family
- Rent Tax Credit
- Retirement Annuity Contract
- Service Charges
- Tuition Fees
- Union Subscriptions
- Widowed Parent Tax Credit
1. Age Credit
Any person who is 65 or over at any time during the tax year.
2. Blind Persons
An individual who is blind at any time during the tax year. Where both spouses of a married couples are blind, the tax credit is doubled. The tax credit is not due in respect of children who are regarded as being blind.In such cases the Incapacitated Child tax credit may be claimed.
Must have impaired vision to the extent that:
- The central visual Acuity does not exceed 6/60 in the better eye with correcting lenses or
- The widest diameter of the visual field subtends an angle no greater than 20 degrees
Guide Dogs: An additional allowance is due where the blind person maintains a trained guide dog. The claimant must hold a letter from the Irish Guide Dog Association confirming registered ownership. It is not necessary to forward this letter with the claim.As the claim may be selected for future audit, the claimant is required to retain all documentation relating to this claim for a period of 6 years.
An Individual can claim repayment of Irish VAT paid on importation of certain aids and appliances, designed to help a blind person cope with daily functions, e.g. Specially adapted computer equipment, Braille books, Braille writing equipment, etc.
A first claim should be accompanied by a certificate from an Ophthalmic Surgeon stating;
- Degree of Blindness
- Whether temporary or permanent
N.B. A certificate from an optician or doctor will not suffice.
3. Deeds of Covenant
Relief is due to individuals on covenants made:
- To permanently incapacitated individuals. There is no relief due on covenants from a parent to his/her permanently incapacitated minor child
- To elderly individuals (i.e. aged 65 or over) Restriction 5% of total income
- For research, teaching of natural sciences and to certain bodies for the promotion of Human Rights
Restriction 5% of total income.
How do I claim?
If you are the person receiving the covenant (the Covenantee) you should send your written claim together with the original Deed of Covenant and forms R185 and 54D to your local Revenue Commissioners office.
If you are the person paying the covenant (the Covenantor) you should send the original Deed to your local Revenue Commissioners office.
4. Dependent Relative
Any individual who maintains a relative at his/her own expense. If more than one claimant, the tax credit is apportioned based on the amount each contributes in maintenance.
Claimant must have a relative who:
- Is incapacitated by old age/infirmity from maintaining him/herself
- Is a Widowed Mother/Mother in Law, Widowed Father/Father in Law - regardless of age and state of health and whose income does not exceed the “specified amount”.
5. DIRT Tax
A person or his/her spouse who is:
- Aged 65 or over or
- Permanently incapacitated and
- Their total income (including the Gross DIRT Income) is less than the relevant exemption limit.
6. Home Carer's Tax Credit
A married couple where one spouse is the Home Carer and cares for one/more dependent persons.
- Married couple - must be jointly assessed
- Home Carer must care for one/more dependent persons
Note: Carers Allowance from Department of Social and Family Affairs (DSFA) is not taken into account for determining restriction, but is a taxable source of income.
- Must not be a spouse
- Is a child for whom DSFA - Child Benefit is payable
- Is a person aged 65 years or over
- Is a person who is permanently incapacitated by reason of mental/physical infirmity
Note: Dependent person must normally reside with the married couple or if they are relatives they must reside:
- Next door
- On same property
- Within 2 kilometres of claimant
7. Incapacitated Child Tax Credit
The tax credit can be claimed by a parent/guardian in respect of a child who is permanently incapacitated either physically or mentally from maintaining himself/herself.
The child must have become incapacitated before reaching 21 years of age or if over 21 years became permanently incapacitated while still in full time education or full time training for a trade or profession for a minimum of 2 years.
You need the following to claim:
- Childs name
- Date of Birth
However, if the tax payable as two single people in that year is greater than the tax which would be payable as a married couple - a refund of the difference can be claimed.
Any refund due is apportioned by the number of months from the date of marriage to the end of the tax year and will be calculated after the end of the tax year. This refund normally only arises where a couple are liable at different tax rates where one spouse benefits from the unused lower tax rate/credits of the other spouse.
The Married Tax Credit is due on a Cumulative Basis where the marriage takes place before 1st February. (For years prior to 2002 the date was 6th May).
If one spouse only is in employment the Married Tax Credit is due on a Week I Basis.
The following options are available:
- Joint Assessment/Aggregation
- Separate Assessment
- Separate Treatment/Assessment as Single Individuals
Joint Assessment is usually the most favourable basis of assessment for a married couple. One of the spouses - the assessable spouse, assumes the responsibility for the joint tax liability. The other spouse is called the non-assessable spouse.
The Assessable Spouse:
- Is assessed on the combined total income
- Receives combined tax credits and standard rate bands
- Should file the joint tax return and include full details of the couples combined income
Seperate Treatment is not to be confused with Separate Assessment.
Under Separate Treatment each spouse is treated as a single person for tax purposes.
- Must submit their own tax return.
- Is assessed on his/her own income.
- Receives tax credits and rate bands appropriate to a single individual.
- Cannot claim relief for payment made by the other spouse.
Either spouse can claim.
Must be made before the end of the tax year.
Verbal Claim acceptable.
Must be made by spouse who originally applied.
Must be made before the end of the tax year.
8. Top Slicing Relief on Lump Sum Payments
Lump sum payments paid on Redundancy/Retirement are taxable. However, they qualify for special tax treatment and they may be exempt or qualify for some tax relief.
9. Married Persons
In the year of marriage, for tax purposes, both spouses continue to be treated as two single people.
10. Health Expenses
A Repayment of Tax may be claimed in respect of qualifying medical expenses incurred by a taxpayer and/ or his /her dependants. The first €125 per person does not qualify for relief. Where several dependants are the subject of a claim, the overall restriction is €250 for a group.
- Certain Costs of Doctor/Consultant Fees, Dentist
- Diagnostic procedures carried out on the advice of a practitioner
- Drugs or medicines prescribed by a Doctor
- The supply, maintenance or repair of any medical, surgical, dental or nursing appliance used on the advice of a practitioner
- Maintenance/Treatment in an approved hospital or approved nursing home
- Transport by ambulance
- Reasonable travelling & accommodation expenses if qualifying health care is only available outside Ireland
- Home/Special Nursing - in certain circumstances
- Educational psychological assessments and speech & language therapy services for children, applicable for 2001 and subsequent years
There is no need to send receipts. You should retain your receipts carefully in case we ask for them at a future date.
11. One Parent Family allowance
An Individual (whether widowed, single, divorced, deserted, separated) who has a dependent child resident with him/her overnight for all or part of the tax year:
- Must not be entitled to the Married Personal Tax Credit
- Must not be living with another person as husband and wife
12. Rent Tax Credit
An individual paying for private rented accommodation e.g. bedsitters, flats, apartments, houses, etc.
13. Retirement Annuity Contract
Any individual who is:
- Self Employed or in a non - pensionable employment and
- Who pays a premium under a Retirement Annuity Contract to provide a pension for his/her old age or for the benefit of his/her spouse or dependents.
14. Service Charges
All Service charges paid, in full and on time, to:
- Local Authorities for domestic water supply; domestic refuse collection; domestic sewage disposal
- Group water schemes for domestic water supply
- Private Contractors for domestic refuse collection
15. Tuition Fees
Tax relief at the standard rate of tax is available for the following:
- Tuition fees paid for certain full-time and part-time undergraduate courses of at least 2 years duration
- Tuition fees paid for certain training courses in the areas of information technology and foreign languages
How do I claim?
The receipt should show:
- Name and address of individual who paid tuition fees.
- Name and address of student.
- Course of study and duration.
- Confirmation that the college is publicly/privately funded in an EU\non-EU country
16. Union Subscriptions
An individual who is a member of a Trade Union at any time in a year of assessment. An individual must be a member of a Trade Union which is:
- The holder of a negotiation licence under the trade union Act 1941
- An exempted body within the meaning of Sec 6 of the Trade Union Act 1941, as amended by the Trade Union Act 1942
- A Garda Representative Body A Defence Forces Representative Body
Maximum - €200. In any year Regardless of the level of subscriptions. This equates to a tax credit of €40.
17. Widowed Parent Tax Credit
A widowed parent with one or more dependent children following the death of a spouse. Conditions:
- The widowed person must not have re-married by the start of the tax year
- Qualifying child must be resident with the individual for all or part of the tax year
- Only one tax credit granted, irrespective of the number of children
- The tax credit is not due to a person who is living with another person as husband and wife
- The tax credit is not due in the year of bereavement